Sun's reckoning! The Verge exposes Tron founder's misdeeds, including insider trading, money laundering, and abetting crimes.

TRON founder Justin Sun, also known as "Sun the Reaper" in the industry, has gained a controversial reputation for his ability to "reap the leeks" faster than a sickle in the cryptocurrency field. Yesterday, the foreign media outlet The Verge compiled a series of his actions to evade regulations, exposing his various wrongdoings in an article titled "Justin Sun's Multiple Escapes." This is a summary, for a detailed description, please refer to the original article.

Justin Sun's First Escape

In 2017, during the peak of the cryptocurrency ICO frenzy, Justin Sun's company TRON launched a token called TRX in September of that year, which was hugely successful and quickly sold out at a price of $70 million. Controversially, the sale took place one day before China completely banned ICO activities.

Many token issuers, after raising large sums through ICOs, immediately sold off their tokens causing prices to plummet, leaving most buyers with nothing. At that time, the United States also claimed that ICOs were tools for financial fraud, pyramid schemes, and various illegal and criminal activities.

According to sources, after Justin Sun learned about China's ICO ban through Binance CEO Changpeng Zhao, he still insisted on conducting the ICO and then flew from Beijing to Seoul after its conclusion, eventually heading to San Francisco. At that time, Justin Sun considered himself a fugitive and was prepared to leave at any moment.

Insider Trading Team

After staying in San Francisco for a few months, as the price of TRX continued to rise, Justin Sun used $140 million to acquire the software company BitTorrent. Subsequently, to improve the business between TRON and BitTorrent, senior BitTorrent executives held separate meetings in different departments at TRON's Beijing office.

According to sources, BitTorrent's CFO Dipak Joshi was shocked by what he saw, discovering that Justin Sun was running an insider trading team in Beijing. When the team learned that TRON planned to announce positive news to the public, Justin Sun would instruct them to buy TRX and push the price to the desired level. After the news was released, they would sell it to make huge profits.

Upon learning of this, Dipak Joshi tried to distance himself from TRX-related business and avoid discussions about cryptocurrency, believing this would prevent him from getting involved in the dark side of cryptocurrencies.

This behavior could potentially lead Justin Sun to trouble with the U.S. insider trading regulations. If TRX is considered a security, his unfair trading using "material nonpublic information" could expose him to criminal liability.

To avoid trouble, Justin Sun hired David Labhart, a senior executive who had worked in the compliance department of the SEC for 8 years. Labhart suggested a thorough reform of Tron's compliance process and direct collaboration with BitTorrent's legal advisors. However, Justin Sun was unwilling and requested that TRX be shaped as a "utility token" rather than a security.

Subsequently, Justin Sun conducted another ICO, this time issuing the BitTorrent Token (BTT). With over 100 million active users on BitTorrent, he saw this as a lucrative move. To prevent accusations of selling unregistered securities to the SEC, Justin Sun asked David Labhart to write a legal opinion to avoid liability. However, Labhart refused and resigned after Justin Sun decided to proceed with the BTT airdrop.

Acquisition of Cryptocurrency Exchange Poloniex

Poloniex was once a popular but highly risky exchange that listed many "Shitcoins" in the eyes of investors, with over 400 different types of coins. However, in 2018, Circle acquired Poloniex and implemented strict KYC procedures to eliminate illegal activities on the platform.

However, in 2019, Justin Sun acquired Poloniex with the goal of restoring it to its original state and relocating its company registration address to the Seychelles to prevent users from suing Poloniex. Under Justin Sun's control, the listing requirements at Poloniex became more relaxed, and the previous KYC system was overturned.

According to sources, to quickly approve new customers and increase usage, Poloniex established an automated KYC system that could pass even if customers submitted a photo of Donald Duck. "Forge the KYC! Forge it!" Justin Sun angrily exclaimed at a KYC meeting.

In addition to the KYC misconduct, during Poloniex's operation in recent years, many users accidentally transferred Bitcoin to the wrong Tether address when moving funds. Justin Sun ordered his employees to collect these Bitcoins and transfer them to Poloniex's public wallet instead of returning them to users, resulting in around 230 Bitcoins collected, worth approximately $9.2 million.

Regarding this behavior, Andrew Verstein, a law professor at the University of California, Los Angeles, specializing in cryptocurrency and financial crime, stated: "As Justin Sun is the sole owner of Poloniex, he is ultimately responsible for this. Converting customer funds for personal use is absolutely criminal."

Justin Sun Under Investigation

Currently, employees working for Justin Sun have received subpoenas from a grand jury, and the Southern District of New York's prosecutor's office, which handles Wall Street financial crimes, is seeking criminal evidence against Justin Sun. The overall investigation is led by the FBI, and Justin Sun has hired a top defense attorney named Telemachus Kasulis.

As the legal network expands massively, the grand jury is exploring a long list of potential charges against Justin Sun, including: mail fraud, fraud, money laundering, spending proceeds of a criminal enterprise, lying about unregistered securities, aiding and abetting crime, and conspiring to defraud the United States.

However, Justin Sun left the United States before the outbreak of the pandemic. Even if the U.S. does indict him, given his multiple citizenships, extradition terms could potentially impact the situation, and the outcome remains unclear.

Justin Sun's Response

In response to The Verge's article, Justin Sun denied the false accusations and fabricated stories, presenting several rebuttals:

1. Poloniex has always had a good reputation, maintaining the highest standards in protecting customers' crypto assets over the past 8 years, with a strong track record of operations and no significant security breaches.
2. This is entirely a lie from The Verge and the journalist, and a blatant defamation of Poloniex's operations. Poloniex has robust risk management and strong financial resources, consistently providing top-notch service to our customers.
3. We have been working diligently with regulatory authorities and investing in state-of-the-art KYC equipment that meets industry standards.
4. In fact, Poloniex is not registered in the Seychelles. The exchange does not operate in the United States or serve U.S. customers.
5. As the World Trade Organization ambassador for Grenada, I strive to uphold the highest standards in the public and industry sectors. We reserve the right to take legal remedies against any organization spreading false information.

Justin Sun's rebuttal mainly focuses on the Poloniex aspect, with no mention of the crimes discussed in other articles.